I am pretty sure some of us remember our grandparents telling us when we were kids to make sure that we clean our plate of every grain of rice, if not later in life we would marry someone with lots of blemishes on their face. That was the very first time I learnt the concept of future value and I am thankful that today, my spouse has a flawless face.
For those of us that have studied some finance in our lifetime, the basic concept of insurance is all about future value. Future value is the value of a current asset at a future date based on an assumed rate of growth. It is therefore important to investors and financial planners as they use it to estimate how much an investment made today will be worth in the future. Similarly, insurance is a contract, represented by a policy, in which an individual or entity receives financial protection, hedging against possible financial losses or to leverage on a potential higher rate of return in the future. Now that we are done with the technicalities, let us focus on our friends - the insurance agents. Insurance agents with their extensive financial knowledge and wide people network know better than most that the world is changing faster than we could imagine and we can never predict what the future holds. With rising cost in healthcare and many more external factors affecting how we live our lives and operate our businesses, insurance agents have always told us (their clients or prospects) to be forward thinking, to take action in the present to plan and protect our interest in the future.
The question is are insurance agents forward thinking themselves especially in the area of innovating their business and strategy in our rapidly changing world?
With significant advancement in technology to analyse data, process it and deliver precision output, companies are already trying to utilise machine learning (ML) and artificial intelligence (AI) to disrupt industry processes. Technology being a big part of our lives now, customer expectations have also soared to demand greater convenience and instant gratification. Add these to steeper competition with easier access to knowledge and resources to sharpen their sales tactics, the world fighting a pandemic and uncertain global economical situations. What we deem as the social norm in life may no longer be relevant.
Ready for the shocker?
We have spoken to countless agents and many do not have the exact answer how they could innovate to prepare their business for the future. These are the same people that have been telling us day in day out to plan for our future! Worse still, there is a significant portion that feel that they do not need to change the way they conduct their business at all just because they think they serve a niche market like the “high net worth community”. This is by far one of the biggest misconceptions. The fact is, consumers that are more affluent actually are the ones that are more demanding of customer service.
3 things to note about this “high net worth community”:
They have easier access to the latest news and technology.
They have many people around them vying for their attention and wealth.
They have much at stake and are more concerned about the competency of the one who is managing their wealth.
Insurance agents that think they can wing it through life and their business are soon to be faced with very harsh realities. Innovation is absolutely critical to the new world of sustainability, and it helps to distinguish between the "leaders" and the “followers". If you are an insurance agent today, don’t just tell your prospects or your clients to think ahead without doing the same yourself. Steer away from that hypocrisy! It is time consider the future and embrace innovation! Make plans to transform your business to effectively engage your clients and prospect digitally. Technology is here to stay, we want you as insurance agents to continue to do what you do best and thrive.